Emerging Economies Face Market Turbulence Amid Global Challenges

Emerging market currencies and stocks declined for a fifth day, pressured by U.S. economic policies and regional challenges. MSCI's stock index dropped 0.8%, while currencies fell 0.2% as the strong U.S. dollar persisted. Investors are wary amid speculations over tariffs and stagnating economic growth in these developing regions.

Currencies and stocks from emerging economies took a hit for the fifth consecutive session on Thursday, as investors evaluated economic growth data from Poland and Romania amidst global economic uncertainty. The MSCI index for emerging market stocks fell 0.8%, and a related currencies index dipped 0.2% as the U.S. dollar reached a one-year high.

The declines come amid a backdrop of wider market challenges, including the repercussions of Donald Trump's U.S. presidential victory and concerns over China's economic rebound. Analysts, notably from S&P Global, highlighted that tighter credit conditions and a strengthening dollar could pressure developing economies further.

Particularly at risk are currencies from Central and Eastern Europe, along with those from Latin America, due to potential tariff changes and shifts in the U.S. Federal Reserve's monetary easing policy. In Asia, Hong Kong's stock market fell 2%, led by significant drops in property sectors despite China's tax breaks for the housing market.

(With inputs from agencies.)